tv Worldwide Exchange CNBC July 2, 2015 4:00am-6:01am EDT
very warm welcome. this is worldwide exchange. >> i'm seema mody. here are your headlines from around the world. >> a slew of solid data boosts sentiment ahead of the jobs report. >> the time for talking is over. negotiations with greece are put on hold until after sunday's referendum but creditors in athens now arguing over whether the vote is a yes or a no to euro zone membership. >> investors go cool on
electrolux. but the ceo is confident of a resolution. >> racing to the top of the market after a tie one sprint. the time for talking with greece appears to be over. the euro group president says creditors will no longer negotiate with athens until there is an outcome to this sunday's referendum. alexis tsipras continues to accuse institutions of blackmailing the country and insists this weekend's poll is not a vote on staying in the euro zone. >> some insist on connecting the results of the referendum to the country stay in the euro. they even say i have a secret plan to take the country out of the european union if there is a no vote. they are knowingly lying.
>> the imf chief says the fund will continue to gauge with greece despite athens missing it's payment. however she added she was unclear where negotiations now stood. >> we have received so many latest offers which themselves have been validated, invalidated, changed and it's quite uncertain where the latest proposal stands. >> let's get to julia live in athens. a little bit of positivity in markets yesterday off the news that negotiations could possibly start up again but it seems nothing material will come out of them until we have this vote at the weekend. >> absolutely wilf. that question is the absolute proper one. there are no negotiations until after sunday. we wait and look at what this vote looks like. if we get a yes vote are the creditors still going to be
willing to negotiate with this government going forward? as far as i can see they made it pretty clear here that they find the situation with this government and with tsipras untenable at this stage. we have to wait and see what happens with the vote. one of the latest polls from euro to date shows that 47% of people would vote yes. 43% say no. for me what the most interesting thing about this is is if you ask a separate question whether they're willing to remain in the euro no matter what the cost 60% say they would. they would want to. i think that highlights the confusion over just what question is being asked here. the people are struggling. they're cueing up to get their 120 euros out for this week.
we just spoke to the author of a book that made a great point, this was already a creditless society and now it's moving to a cashless society. we also had the likes of export associations here warning about the costs. there's going to be food shortages as early as the coming next two weeks or so. the impact on exporters likely to be around 80 million euros a week. the lack of imports due to this payment system trouble is going to be toward 600 million euros. i don't think we have really anticipated yet just now damaging the capital controls are going to be for this economy going forward. never mind what happens after this referendum this weekend and of course the political fall out that ensues. guys pack to you. >> julia, thank you for that. now for a unique perspective on the unfolding crisis i'm delighted to say joining us in studio, son of the former king
of greece. a real pleasure to have you with us. >> thank you. >> what do you make of the efren referendum and will it lead to a decisive out come. >> it's asking people to say yes or no to a question not easily deciphered. it would be easeier if we knew we were voting to stay in or out. it's not easy to know what to answer to exactly. it sounds more like i'm going to say yes or no to the question of -- is the question given to us from europe what we want to go forward with. is a proposal what we like or not like? however if you say yes to the proposal you stay within europe. if you say no to the proposal which is what is being suggested you may be leaving europe. i believe the government is suggesting they will then be
going back to negotiations should we get a no vote and feel it in a stronger position. we need to be a unified country and not split ourselves in half and find a way to work as a nation for a better relationship with europe and our creditors. >> yesterday mr. tsipras called eu leaders extremist conservative forces and trying to lump all the blame on the creditors. do you agree with him? the greek people have been suffering dramatically. the governments have been working in certain ways toward something that would be beneficial. this government came in to fight
our corner. to get a better result for greece so that we would stay within europe. this has not happened after the five months of negotiations. i would hope we could still stay in the game and say yes and carrie on negotiating going forward. i fear that the no would put us in a position we are not able to negotiate. i'll not trying to be decisive here. we need to be united on this front and understand the exact answer to the question that is required and the greek people have fought through many different times, hard times, and we do not want to be decisive here. we're a very strong people and need to work as a unit toward the best result. they may have a hard time understanding. it's difficult to come up with an answer for what is a very, very difficult question. >> it all comes down to the
referendum on sunday. assume there's a large yes vote. mr. tsipras rescience -- re-signs will they offer greece a new deal? >> europe has always been there to negotiate. they need to also give us breathing space and i think they have done that mistake as far as i can tell is not giving us any room for negotiation -- i wasn't part of the negotiation so i cannot be privy to how these things go on and i don't intend to know but i feel we needed to be more negotiable with them and them more with us. maybe if we can reengage under a different situation it might be period different. >> given where things are now, stepping back from the immediate volatility of the situation, was it right for greece to join the euro in the first place? >> it was the beginning of the euro, it was a time where i
think it was everybody should join in. i don't think it was wrong to join but were we absolutely ready? perhaps not. showing we were not ready to join but on the other hand we did have a lot of benefit by being there and could have benefitted more if we carried through with different governments in different ways. the euro is a very complex program and it needs a lot more work. we need to work as a unit again and that's a whole different question for us. right now, the point that i'm looking for is unity, stay within our boarders. we are a european country. we're the first developed country to default. so we need to stay within europe and have protection in our boarders so we can work as a unit within the country and
within europe. >> you said earlier that the greek people are a very strong people. where will greece be in five years time? >> it depends on sunday. but we're hard working people. if we open up our economy and allow for investors security in our country, we can go a long long way. we don't want to scare people away. we're coming into the tourist season. i'm going to be back in greece. my family my father my brother lives there, it's the most wonderful place in the world. we need to work toward that and not scare people away. >> here's a live look at people cueing outside of a greek bank
live in athens. banks were closed initially now. there's a limit on how much greek citizens can take out of the banks. but as you can see people cueing outside of a bank there at athens. now let's get a look at european markets. >> yesterday strong rallies across the board because of the positivity negotiations might start again. we saw a 1.5% gain for the stoxx 600. we did open strongly and we paired some of the gains and we're flat now. i want to point out one thing, if we rewind 2-thirds ago the stoxx 600 is higher today than it was then. the last ten days have been dominated by negativity toward greece. there was a strong rally two weeks ago. that was worth remembering. market versus sold off this week but they're not that much lower in the grand scheme of things. here are the individual market performances. the dax up after a 2% rally yesterday. france similarly just above flat. i just want to dive into one share in particular.
electrolux shares tumbled on the news that they're suing the block the swedish company from buying the appliance business. the $3.3 billion deal will hurt competition and consumer as it will combine two of the top three makers of stoves and ovens. he is confident a deal will close this year. he added the company may need to enter settlement negotiations. the share price off some 10%. shares in dixons carphone in the green after sprint announced a retail agreement with the wireless retailer. the two companies will fund a pilot program where they'll build and operate 20 new sprint stores in the united states. if the pilot is successful they'll form a joint venture to open and operate more stores. as you can see up 3.3%. let's have a quick look at rates because the interesting thing is the way that the euro move has been opposite every day to the european equity markets in the
news from greece. so positive news from greece which has lefted equity markets has tended to push the euro lower given that markets are flat today. the euro is today although it was off yesterday. 1106 the price on euro dollar at the moment. seema. >> let's get a look at what's coming up on the show. they cast a cautious eye on the new steve jobs trailer from universal pictures. we get to the core of the picture about the apple co-founder. >> plus have european unicorns got leg? we compare the market with it's u.s. counter part. and after a strong june for u.s. autos one of our guests will reveal his top pick for the second half.
push your enterprise and you can move the world. but to get from the old way to the new you'll need the right it infrastructure. from a partner who knows how to make your enterprise more agile, borderless and secure. hp helps business move on all the possibilities of today. and stay ready for everything that is still to come.
and throwing the kitchen sink to try to stabilize the stock market but no to the no avail. we're down now over the past couple of weeks if you look in terms of duration by well over 20%. the other question we could ask ourself is where are the bargain hunters? why is no one buying into this melt down? perhaps they fear that there's just more volatile tillo come. remember the chinese authorities have now backtracked. they have reversed that position. they have now relaxed some of the conditions on margin trading. let's not forget it's margin debt that got us into this mess in the first place. it really fuelled this equity bubble. it's more than doubling off the market over the past year or so. so this is very much a work in progress in terms of the regulations. it's a developing market stock
market and policy is developing as well. so it's very much a work in progress. so expect more volatility. as i said it's surprising that we haven't really seen the bargain hunters. i will say this. i think the professional investors are clearly lacking in the shanghai list today share market despite the best efforts of the stock connect. all of those professional investors are gravitating toward shares given the valuation gap that's the more compelling safer, no brainer trade in the medium term where we are expected to see momentum. a lot of people are saying avoid the a-share market in this stage. wilf seema, back to you. >> sri thank you for that. let's discuss china a little bit more. edmond is with us. good morning. >> good morning. >> good to see you as ever. >> thank you very much. >> a bit of easing from china including this relaxation of margin lending in terms of the stock market. is this desperation or this clever necessary policy moves?
>> clever i'm not so sure. if we viewed the volatility in the market i'm sure that wasn't the outcome they were wanting. you don't really want to see this type of volatility. what the chinese government tried to do is encourage long-term investment in the stock market by private investors. they're faced with an ijaging investor and they need a solution to the department. that has to be via pensions and to a large extent in equities. seeing this volatility isn't going to help is it now? >> but is central bank policy a reason to be bullish on chinese stocks then? >> the chinese economy is in a slow down phase at the moment. so even if they do -- and they have eased monetary policy the problem is is it enough? in the very short-term no. things are slowing down. things will continue to slow down. if you look at things like electricity demand there's a slow down in progress.
growth is well below what the government is targeting at the moment. it will pick up but it will take some time and that's why foreign investors are thinking hang on a second. the market is up over 100% since the beginning of the year. it was cheap then and not cheap now and there's a lot of volatility and policy is changing day by day. let's just see what happens. remember the msci inclusion isn't going to happen until at least november. >> shanghai index. let's talk about the market. bear market territory down 22% since it's recent high in june. some are drawing comparisons. even when i look at comparisons, trading at 51 times price to earnings ratio. >> yes, that's all true. that's all true and i don't know. i've seen the same comparisons about the nasdaq. i'm not so convinced because there's a very long-term story at play here. the real question is though at what point does china stop falling? as with any bust it's impossible to say. we can't just draw an arbitrary
line in the sand and say it's 25% down. when the market is up over 100% it can fall a long way. the one thing i can say is the shanghai composite has a really retraceable 50% of its gains. that's showing we retraced a long way. my feel as good there's a lot of long-term value to be had in china but you may not want to step in today. >> is there a way to play the long-term case without having to get involved with this short-term volatility? >> you can wait until it bottoms out. unless you're a hardcore value investor don't try to catch a falling knife. be patient. investors are not patient enough. be patient. let the dust settle. you don't need to buy today or tomorrow. the long-term story in china is going to be there for years. you don't need to dive in today. however what i do see which is interesting, in the u.s. and in the u.k. we see funds in the u.s. and investment trust in the u.k. offering value in china.
they're trading between a 17 to 25% discount in net assets. in the u.k. you can spend 83 pence and buy one pound of chinese equity assets today via an investment trust and that's a nice way to ease yourself into the china story. >> stick with us. another big story will be the u.s. jobs report. the june u.s. jobs report is out today at 8:30 a.m. eastern. a day early because the u.s. markets are closed tomorrow for the july 4th holiday weekend. forecasts call for 230,000 in nonfarm payrolls versus 280,000 in may. unemployment will tick down to 5.4% while average hourly earnings are are rising 0.2%. the report could surprise to the upside after the u. s. added the most private sector jobs in june since the end of last year and ism says manufacturing hiring rose to the highest level in six months. so edmond expectations are high coming into the june report and the big question is will it be a strong enough number to give
janet yellen the ammunition to raise rates in september. >> i suspect the answer will be yes. the fed will want to raise. they have been very clear that they want to raise in september barring any nasty surprises in the economic data between now and then. but she has also signalled that the fed will be extraordinarily slow in terms of raising rates beyond that. so i think she is being very clear. my feeling with the data is that it is certainly improving. q-3 and q-4 will be a lot stronger while q-1 was a disaster. q-2 not great. we expect q-3 and q-4 to be better. i certainly would. one of the key focuses is the housing market. the housing market has been slow. it's starting to pick up fast if you look at housing starts pending home sales. >> and housing prices last week. >> exactly. we're seeing a lot of momentum and the u.s. housing market is still not expensive. so that could be a motive for the economy going into the second half. >> and auto sales yesterday very
strong. has the consumer now really got into gear? it's come quite late bizarrely as we get close torer to rate rises but the consumer is performing now. >> starting to happen. that comes back to wage increases. we're starting to see wage increases coming through in the system which is why janet yellen wants to start raising rates. there are these little signs of inflation. not hyperinflation but a little bit of inflation. forget the deflation story there's real inflation and gasoline prices in dollars in the states are rising and that will overtime be reflected in not only headline inflation but in core inflation. remember when we move stuff around in trucks they use diesel. if that's going up that has to be reflected in the goods and services. so we'll enter into gore inflation by this year. >> gas prices are in the u.s. that's the first time since 2011
going into this holiday weekend. we see u.s. families take advantage of lower gas prices. that could be taking place this year? >> yeah and again gas prices are on the way up but they're still relatively low so that helps consumer demand and i think while -- as long as they build in, the wage increase i'm getting is going to continue. i am going to get more money. the feel good factor comes back to consumers and that will drive the u.s. >> i want to touch on the bond market. a big correction there. most suggest that's a reaction to an overbought market. would you agree with that? >> a reaction to an overbought market. this comes back to the inflation point. people focus so much on demand and supply. what you need to focus on for thronger the longer term is inflation fundamentals. why shouldn't bond yields go up? >> it's a growth signal almost. >> i think that's right. in a sense i would say rise in
bond yields is a good thing because the economy is actually doing better than it has been for quite sometime. we're coming out of that deflationary scare. it may not be 3% growth. it may be 2.5 in the u.s. i think right now 2.5 will be okay. >> global fund manager at bsc financial group. >> still to come on the show a year of no return. global uncertainties eurk investors. we get the full report, next. because they're getting comcast business internet. comcast business offers convenient installation appointments that work around your schedule. and it takes- done. - about an hour. get reliable internet that's up to five times faster than dsl from the phone company. call 800-501-6000 to switch today. perks are nice. but the best thing you can give your business is comcast business.
with expexctations for a strong month of hiring. >> negotiations with greece are put on hold until after sunday's referendum but creditors arguing over whether the vote was a yes or a no to euro zone membership. >> investors go cool on electrolux. the ceo of the swedish appliance maker is con fireworksfident of a resolution. >> announcing a tie up with u.s. mobile operator sprint which will expand it's foot print state side.
>> should we talk about sterling? >> let's do it. >> the pound is my favorite currency. >> not mine but let's go ahead. >> what is is it doing today ahead of u.k. construction data? 15588. it's off about 15 basis points so far today. it's enjoyed a very nice rally over the last couple of months. let's have a look. u.k. construction pmi rises to a four month high in june. it's hit 58.1. quite a significant rise from 55.9 in may in a poll of expectations. so a descent rise there and you can see that sterling gained 10 basis points off the back of it. nothing too significant. we have a manufacturing pmi disappointing yesterday of course the all important was is 70% of gdp.
some of the home builders off the back. you can see they're plus or minus about .5%. so nothing too ground break today. >> interesting reading the report, growth was fastest in the house building sector but civil engineering projects and commercial work were catching up quickly. let's give you some details behind that construction pmi report rising to a four month high. >> indeed. we will be focussing more on this stuff next week with the budget on wednesday. let's have a quick look at other rates. what are they doing today? the euro is basically flat. just fractionally positive. 11069. we have sterling as we just said 15610. let's talk more about rates. joining us is jane the senior fx strategist. let's get straight to the big one. the euro dollar. it's been moving in the opposite direction to european equities in terms of responding to greece news. why is that? >> it's been in recent week with
these safe haven qualities and we can go back to the beginning of the year and see why that is. in the beginning of the year we had the ecb announcing the quantitative easing program and that of course pressured down yields in the region and as always quantitative easing has the effect of driving investors into riskier assets and the fact that the euro went down so much at the start of the year suggests that many of the flow was moving out of the european region into higher risk assets outside and recently because of the increase in risk aversion related to greece and then money started to come back into core european assets and of course what that means is that whenever those glimmers of better news happens they take on higher risk assets and move out of the euro zone. it can be explained and that means if we do get it over greece in the next week or so do get good news about greece
then the euro will go down and euro dollar will start to head back lower again but of course the fed will provide an interesting part of that story. >> an interesting perspective on the odd safe haven they have had. will things go as far as total capitulation for greece which would also be negative. >> it's hard to know exactly what would happen if there was a movement of greece out of the system. you could say greece leaving out of the system raises questions about the emu. well, it is likely that many of us as we move into bunds and some stability could be granted
for the euro. very difficult to know which way the euro would be pulled in that worst case scenario event but in any case i don't think many investors are really expecting the emu to be totally tested if greece were to move out despite the question marks that such an investor would raise. many think they're in place and emu would hang together and less reason to really get into panic stations about this. >> it caught many by surprise. many trying to draw conclusion as to what this means as to whether investors are focused on greece or something else. i also want to point out that the use of the euro as a funding currency, is that another reason we're seeing the euro higher against the dollar despite this lingering concern around greece? >> again exactly it. that was what happened at the start of the year when interest rates were pushing so low and
used as a funding currency so that helps explain the reaction of the euro this year and why the euro is therefore finding support as the euro comes back in. and a lot of those earlier in the year looking for higher returns overseas. >> ji want to stick just on this euro dollar pair but so much to talk about so we're going to. let's talk about the dollar side of the mar gain. jobs report today, what are you expecting from that and will the dollar side of the bargain start controlling soon. >> it should if greece were to drop back off the headlines, concentrating on the u.s. economy and the fed again very much so and today is very important which promises to be good-looking at the adp report that came out yesterday but we must also remember to look at that wage inflation data. inflation still very moderate so
we need to determine how fast inflation can build. very very important for that. we don't think that the fed can can hike interest rates until december based on the inflation out outlook but even so, that should really be good for the dollar relative to the euro given that the ecb is still engaged in the asset purchase program. >> jane thank you for joining us. >> we want to draw your attention in the european markets. the heaviest selling pressure in europe given the lingering uncertainty in greece. and today how are we looking on thursday? well a mixed day, ftse 100 down ever so slightly. the xetra dax with 13 points. cac 40 with a gain of four points. it was yesterday during worldwide exchange where there was that report that greece was going to give into the terms of international creditors. the day went on and we saw no deal emerge yet stocks still ended higher in europe as well as in the u.s.
right now here on thursday a mix dade of trade. the ftse 100 down about 39 points. shall we talk about bonds? >> let's inside. let's just have a look at where bonds are trading today we're looking at the bund at 0.86%. that shows yields rise yesterday because of the positivity that seema mentioned. ten year in spain 2.3 and france 1.3. >> now speaking of global ponds suffer their worst losses in over two decades. a surge in u.s. corporate supply pushed yields higher. the bank recommends holding cash due to the lack of yield across numerous asset classes. what i also found interesting about this the big picture in our view remain establish that the unwind of the global global liquidity trade has begun. that's deep compression in the bond market going forward.
>> it's been fascinating over the last quarter or so and the big correction, even though we've seen the big correction and that's a meaningful correction but what has driven markets is relative decisions. what is more attractive than what else. that's why i am concerned about markets in general. i don't think people have been weighing up levels of bonds or equities. they have been thinking look yields are low so i have to put my money somewhere. that's going to unwind soon enough because people can't always be backed by relative valuation rather than absolute valuation. >> the lack of yield in the fixed income market are one of the reasons investors have been staying active in the equity market because the s&p 500 has an average yield of 2%. i also point out the high yield debt market continues to perform relatively well indicating there's a certain level of risk appetite out there. big question is what happens when the fed does raise rates? will that change investors position when it comes to high
yield? >> part of the correction in the bond market was because inflation expectations are rising and it is a sign as rising yields traditionally is of growth going forward. that's probably partly true but it's much more a simple correction from a very overbought european qe or japanese qe or u.s.we trade. that's a much more worrying thing for markets than china hoped this is because growth is coming through. as you say to jane foley, the euro has been used as a funding currency over the last six months and those trades are going to unwind further. >> you speak to hedge funds back in 2014. they were calling for 3% yield on the u.s. ten year and of course it didn't end there. it's still well off that target that many investors are still calling for here in 2015. a lot of it on central bank policy driving yields higher and ultimately lower here in europe.
>> let's focus on the u.s. consumer who is back from the dead according to jp morgan which has revised up it's q-2 growth estimate to 2.5% after construction data and auto sales. u.s. consumers are spending again and this will be the most significant story of the second quarter. and we want to hear from you on this. are you spending more and how will you be spending the july 4th weekend? if you want to join the conversation get in touch with us by e-mail email@example.com or via twitter. our personal handles on the screen now. it's rather unfair but i have a long weekend this weekend and seema doesn't. so the brits getting to celebrate and you don't. >> my day off is on monday. >> so all of this complaining this morning, making me feel guilty about having tomorrow off. typical. >> exactly. exactly. >> you enjoy your day. have you ever experienced july 4th in the u.s.? >> no i have spent july 4th
here with americans a number of times but i have never been out there. >> it's an epic holiday weekend. full of barbecues and celebrating your country. a lot of red white and blue. patriotism front and center. >> what people are going to spend money on sparkling water, healthy snacks. >> granola. >> museum passes. >> maybe a trip to the cinema. >> the zoo. >> library books. sounds like a blast. >> it's a family weekend. a weekend you spend with your family. you bring people over. cook some steak. >> it's not just family. it's a big party or family time. >> it can many times be family as well as friends as well. you spend time with your loved ones. >> it's a bit of a party too. >> that's kr you typically see alcohol consumption rise. from what i understand. >> finally mody gets up to it. >> research takes place. i haven't experienced that of course. >> what the choice? >> beer. >> nice. >> but as we were discussing yesterday, constellation brands
which beat expectations one of the best performing stocks the millennial generation is now shifting away from beer into whiskey and scotch and the brown stuff which is typically seen as the old man drink, like something you would drink but the millennials are now finding that they -- finding new interests in these type of cocktails which is at the end of the day marketing. these alcohol companies have found new ways to effectively market these alcohols to a younger generation. >> old man wilf doesn't like the brown stuff. i do like a little red wine. but mainly beer. anyway can i just say, always brings it back to the market. >> we are a business channel. >> indeed. right. let's move on. do get in touch with us on that. how you'll be spending money over the july 4th weekend. still to come here on worldwide exchange, watch out youtube. facebook's coming to get you. find out why the video sharing website could be about to face some stiff competition.
bank the total value of all european unicorns is $120 billion. only a sixth of apple's total value. >> you are, my friend head of a unicorn. >> well, we're getting there. we're getting there. thanks seema. hi wilf. how are you doing? >> is that reaching that $1 million as a start up. >> unicorns are mythical creatures. until recently the billion dollar start up is a thing of myth. now there's a few of them. europe is doing well but there's a lot more in the u.s. it's the rise of where the tech market is going. >> but the rise is quite extraordinary as you're saying this change that you can get so many $1 billion valued private companies companies. does that point to evaluations? >> to its a phenomenon. it's a time of technology
changing the world. there's a theory that software will eat everything but it's a time of financial markets with a lot of money being raised and searching for growth and technology stocks. private or public and one of the ones where there's significant growth and that's where the money is flowing in and you get big valuation. >> let's talk more about this phenomenon. founded in london and moved to california. why the change and does that point to where perhaps the home of more unicorns is going to be. >> we started out in london. we believe that the technology particularly based in london is strong. it's the place where you can get the best developers from across europe and as an early stage business there's amazing investment opportunities and amazing tax breaks but if you want to raise late stage money. if you want to grow a billion dollar valuation business that means tens or hundreds of million dollars and the one place you need that is out in the valley. >> so that exposure is critical
to your growth and success. >> yes, because you can grow a big home grown business but if you want to raise lots of money the only place available is in valley. to put it in perspective there's more money in one office on a place called sand hill road which is where they're based, in that one office than in all of london for venture capital. >> we've seen a massive rise in the start ups trying to gain more traction. you also had big deals like microsoft and sales force potentially coming together. new companies like box and drop box. how do you differentiate yourself with so many other players in the space. >> it's a huge market. cloud is becoming the delivery model for all software. especially in the enterprise. huddle is a collaboration platform so we focus on a basic fundamental need in business which is how people work together and share information. it comes on the service you provide and market we work in. we're focussing purely on
enterprise and we're very secure and help large government and business organizations to transform the way they work. >> no need for public funding? >> no we're growing very fast and you see companies staying private for longer. especially in the enterprise space where companies take longer to evolve but become bigger overtime. >> speaking of let's talk about two big tech giants. youtube, the video watching website, watch out because facebook is on your back. it's moving further into video sharing by splitting add revenue with publishers that post content on the platform. it boosts 1.4 billion monthly active users is looking to monetize on the shift in taste toward watching clips online instead of on tv. you're in the tech world. you're the head of a start up. what are your thoughts on this move from facebook away from social media toward video. >> when google bought youtube -- >> youtube. >> they created the first unicorn back in the day. so they're responsible for this
phenomenon in the first place and now facebook is trying to do the same thing that google did. we all know we now increasingly watch it share videos and they recognize that and they have a very big share of the mobile especially, ad market and that's especially where people share a lot of this information and share videos. >> video has been crucial over the last couple of years. could this hurt googles earnings do you think going forward? >> quite honestly they're growing the market for everyone. i think facebook particularly has done very well in mobile. better than google in mobile. particularly for video. youtube is still the dominant platform online. >> clearly it's in virtual reality. messaging. i forget by using what's app that we're using a facebook product but that's essentially owned by took. so it's amazing. not just social media.
>> constantly evolving. >> thank you for joining us. we'll leave it there. >> a major overhaul of facebook's image. they upgraded the logo. here's a picture of before on the left and dramatic change on the right. can you spot the difference? it's in the letter a along with a few other small differences. the social network told an online logo blog it wants to reflect where we are now and where we're headed. >> before we discuss this can you say the word logo as you just did. >> logo. >> is that an impersonation of me or what sf i? i like it. >> i'm happy for you to learn my lingo. >> can you tell? >> it's transformational.
i think i have to join again. >> do you feel like you're missing out on this phenomenon? >> no not at all. i have instagram and twitter and youtube. that's fine. >> but you're not part of the digital conversation taking place. >> i am. i'm part of a global business conversation. >> there you go. worldwide exchange. >> make sure you keep watching you don't need facebook to watch us. you need your tv. >> right. facebook's new look. let us know what you think about it. it's hardly a change as far as we're concerned. paypal is buying zoom. an online provider of money transfers ahead of its split from ebay. they're paying $25 a share in cash. a 21% premium to zoom's closing price on wednesday. zoom has 1.3 million customers in 37 countries. it lets users transfer cash via pc's mobile phones and tablets. jumping some 23% in trade in germany today. >> universal pictures has
released the trailer for its film steve jobs and it's caused quite a stir in silicon valley. the reel paints the apple co-founder as a demanding boss that steels the limelight and amasses huge wealth without care for others. while he makes a return at the end the initial portrayal is sure to ruffle a few tech feathers and we want to learn about these visionaries and how they change our lives with their products and we obsess about the fact that they're militant in the board room but they're extraordinary in what they're doing. >> absolutely. just a caveat. this is the trailer. i'm sure it will dramatize and at the end of the movie he will be portrayed as coming out in a positive sense. every genius has a tough side to them. of course they do. or they wouldn't have got to
where they are. that's not something to be criticized. >> exactly. i think some people are trying to draw a comparison between this movie and the social network mostly about facebook and mark zuckerberg and how he started that company and the lawsuits he faced early on and the people involved at that time. >> it will be an interesting movie to see and we'll see how accurate the trailer is. the portrayal of the overall sentiment of the movie but amazing that the second big movie about steve jobs has come out in three years. that shows the level of interest in what is obviously a tech and corporate legend. >> yeah. the fact that these products at the end of the day have maybe changed our lives. i don't know if that's going overboard but they have. >> they definitely have. of course they have. >> now we're going to talk a little bit about sports. swiss authorities say the u.s. has filed extradition requests for seven fifa executives. switzerland will hold a hearing for the officials that were
arrested in may. >> elsewhere it was heart break for england's women football team as they were defeated by japan at the world cup in canada. that goal going in. painful. they crash out of the tournament setting up a meeting out of japan and the u.s. in the final. meanwhile, fifa concerned president sepp blatter will not attend due to personal reasons. how convenient is that? yesterday i was urging england to make the finals so it would set up a usa versus japan final. now that england haven't made it. go usa. >> you're on our side of the table. >> america. >> america. >> let's do it. now while a heat wave gripped northern europe missouri residents were dealing with hazardous weather. a tornado touched down in the city of lees summit. authorities urged residents to seek shelter during the severe storm that brought heavy rains
and high winds that damaged buildings and trees. quarter sized hail and wind gusts of up to 60 miles per hour were reported in the nearby city a lot of crazy weathers these days. london hottest day in a decade. >> it was too hot. >> yeah. >> it was a nightmare. we shouldn't complain. how hot are markets today? just below flat now. we opened a little bit positive but not in a major way around ten basis points of decline. following 1.5 yesterday. >> greece has been dominating the investor conversation but today will be the u.s. jobs report that will be in focus. what can we expect from u.s. markets? what can we expect in today's trade? the dow is indicating a higher open. investors a little bit optimistic nonfarm payrolls, the
estimate is 230,000 for may. 280,000 jobless rate is expected to tick down to 5.4%. >> let's sum that up with a look at the euro dollar as well. european markets versus the u.s. of course. oddly the euro has been moving in the opposite direction to european equities on the back of greek news and it's up today 0.2% but nothing too pronounced. >> 11072 on the euro dollar. we'll be back with more in a bit. >> that's right. five years after largest oil spill in history there's rumors of a global settlement. we bring you the details after this break.
>> welcome to the second hour of worldwide exchange. i'm seema mody. >> here are your headlines from around the world. >> a slew of solid data boosting sentiment ahead of the jobs report. expectations for another strong month of hiring. >> the time for talking is over. negotiations with greece put on hold until after sunday's referendum but creditors arguing whether the vote is a yes or no to euro zone membership. >> ge's asset sell off faces hurdles both side of the
atlantic. it vows to defend it's sale. >> bp waits to hear news on the cost of its oil spill as they call a press conference for this morning. >> and a good thursday morning to you everyone. if you're just joining us here is what you can expect on wall street. u.s. markets are poised to open high right now s&p 500 up 4. there was confusion yesterday as to the state of negotiations between greece and it's international creditors. early on in the morning there was optimism that a deal would come together ahead of the july 5th referendum. the day progressed and we found that there was no deal hah was able to come to the table we've
seen a lot of volatility in the atlantic. we are lower but ever so slightly. just take a look. we're fun down five points. i want to po cuss on the ftse 100. u.k. construction pmi rising to a four month high still about the macrotrade and ftse 100 down about three points. >> let's have a look at bond markets today 0.85 on the german ten year: very strong auto sales yesterday. all eyes on the jobs report today. more positivity could strengthen the case for rate rises in
september. italy .3% t. euro rallied a little bit throughout today's trade now up 0.2%. that's in response to the 1107 at the moment. let's have a look at commodities because the oil price has softened a little bit over the last week or so. we're looking at 56.97-on-w on wti. >> the june u.s. jobs report is out a day early. they call for 230,000 in nonfarm payrolls versus 280,000 in may. average hourly earnings are rising 0.2%. the report could surprise to the upside after adp said the u.s.
added the most private sector jobs in june since the end of last year and keep in mind ism says manufacturing hiring rose to the highest level in six months. >> the u.s. consumer is back from the dead according to jp morgan which is up to 2.5% after solid construction data and auto sales. it signals u.s. consumers are spending again and this will be the most significant story of the second quarter. >> barclays meanwhile maintains a 3% forecast of q-2 gdp after the strong auto sales number. it too says it sees a rebound in consumption through the remainder of the year. let's talk more about the health of the u.s. economy. lindsey, the chief economist joining us. how are you doing this morning? >> good morning. >> we were talking about how the u.s. economy may not be as expected given the port shutdown
and now there's a new confidence in the u.s. consumer. with gas prices lower perhaps they'll spend more. have things truly changed? >> well i think we're still cautiously optimistic. the u.s. consumer is still under a significant amount of pressure. we've seen a rebound in marchand may retail sales but over the last six months we're still talking about a very muted average increase of .1%. it's still too early to say the consumer is back. meanwhile, business investment continues to wane in negative territory when we look at that on an annual basis. housing has begun to show signs of life but we remain still as i mention cautiously optimistic looking out to the second half of the year. hopefully able to get trend growth but not looking for above trend gdp.
is that a mismatch in skills between workers and employers? >> that's something we have been seeing for quite sometime. a skills mismatch. many business wes talked to around the country big and small continue to talk about the idea of having job vacancies but the individuals coming to apply for those positions don't necessarily have the needed or applicable skill set to fill that job opening so we continue to see the jolt survey point to record highs in term of vacancies in the labor market but we continue to see very muted monthly non-farm payroll reports. >> given that the average has been 255,000 every month for the past year does it really matter what an individual print is now? that year we're very close to
september. i'm sure this is already priced into what the fed is thinking. >> no certainly we don't want to look at one months report and the fed will not look at one months report to determine whether or not a rate increase is appropriate near term but they will look at the trend average which leaves monthly payrolls at 250,000 which is the bear minimum we need to cover population growth. we need on average 200 to 250,000 just to cover that change in the labor market. now what's more important is that looking to the growth rate of last year, we ended 2014 at a pace of 325,000. that's slowed to right around 225,000. the loss of momentum is a concern as we look out to the second half of the year. >> it's interesting you're finding that they're switching jobs at a much higher rate.
i was just curious to hear your thoughts. why do you think that is? what does it tell us about the overall health of the labor market? >> a lot of what we're seeing in the youngest generations is underemployment so individuals coming out with a college degree not necessarily taking a position to put that skill set to work and six months later or a year later we're seeing the individuals trying to move up the ladder so this may signal a silver lining suggesting there's more appropriate job vacancies to fit the skill set of the millennials. >> thank you for joining us. i'm telling you this is something to watch. >> it's hard to accept the labor market. >> they're ambitious and want to keep moving. >> very different than the older generation where you speak with one job for 20 or 30 years.
>> i can't imagine being in the same place for 50 years. that's ridiculous. >> let's take a look at today's other top stories. the justice department is suing to block electrolux from saying the $3.3 billion deal would hurt competition and consumers. it would combine the two. it's goal is to close the sale by the end of the year while it's open to reasonable mixes it's prepared to fight in court. let's have a look at price action. >> meanwhile, general electric executives hope to sway regulators as they meet to discuss the u.s. companies $13.9 billion bid for the power unit. the european commission says that the deal would harm competition. ceo expressed confidence that the deal will be completed but
as regulation has made it much tougher to get things done anywhere in the world. >> they'll hope separate news conferences today to discuss the bp oil spill. they could discuss a settlement by the gulf coast states against bp. this comes days before an expected ruling on the amount of fines that bp owes under the u.s. clean water act. let's have a look at share prices up off the back of the news 0.8%. still to come on the show what does yes or no mean when it comes to this sunday's greek referendum? we crossed athens to try to decipher after the break.
>> puerto rico made all it's payments avoiding a possible default. lawmakers say public workers will still get paid. >> mow i just want to bring your attention on to some flashes coming out right now. when it comes to the health of the banking sector in greece a spokesman telling dow jones that the greek government tried to tax the rich instead of cutting pensions and as a result greek banks were forced to close. that's according to a government spokesman. now in a reference to the july 5th referendum coming up on sunday, dow jones reporting that a no vote to creditors proposal would restart negotiations on monday that according to a greek government spokesman. no meetings will take place ahead of the july 5th referendum. now we're hearing that a no vote to creditors would restart the
negotiations on monday. are markets responding? well, the euro dollar just holding on to 110. it's higher in today's trade. meanwhile, imf chief christine lagarde says the fund will continue with greece. however she added she was unleer unclear where negotiations now stood. >> we receive sod many latest offers which themselves have been validated, invalidated, changed, and amended over the course of the last few days that it's quite uncertain exactly where the latest proposal stands. >> julia, there was hope that a deal would emerge ahead of the july 5th referendum but that's unlikely at this point. >> the likelihood of that is nil. there's going to be no deals before this referendum. angela merkel made that very clear in the last two days or so
what we have seen here is a poll saying 47% of people are going to vote yes in that referendum. 43% no. what's interesting is if you ask the question differently, if you ask whether or not they want to remain in the euro zone no matter what the cost of further austerity, 60% say yes. so that indicates a that there's still a lot of confusion about what this referendum means. beyond that what we keep hearing from the greek government here is no matter what this result will go back to the negotiating table even if it's a no then our position will be stronger in negotiating but we will go back to that table. if it's a yes. it seems a similar story
particularly when they're saying no to anything on the table monday morning: it's on the credit situation or the cash situation the impacts of these capital controls are starting to be felt. the tourist industry is concerned and export industry is concerned about food sources from net weekxt week. yet the government argues the banks will open on tuesday. we'll see. back to you. >> thank you very much. just stick with us. the latest flashes coming out. he's saying institutional proposals for greece were quote, cut to pieces by greek leadership and apart from greece himself the members have been
united. julia, my question to you is you've been there so long no often, have you been granted citizenship and are you able to vote this weekend? >> no i haven't and even if i were willing to vote i'm not going to tell you how i would vote clearly. i'm as confused as everybody else about what this voting is and of course, who knows? the most important thing about this referendum is that the explanation of what people are voting for and people still don't understand but the impact is shifting people toward the yes vote rather than the no. then we see what happens on monday morning with this government. back to you. >> thank you very much. >> it's all about the giving. this saudi prince is donating his entire fortune to charity. head to cnbc.com for the full
story. >> now wilfred, is the ipo engine running out of steam in our next guest says that may be the case. stick around that conversation coming up on worldwide exchange. ♪ i built my business with passion. but i keep it growing by making every dollar count. that's why i have the spark cash card from capital one. i earn unlimited 2% cash back on everything i buy for my studio. ♪ and that unlimited 2% cash back from spark means thousands of dollars each year going back into my business... that's huge for my bottom line. what's in your wallet?
closing below the psychological 4,000 mark for the first time since early april. this despite efforts to ease jitters by relaxing margin lending rules. let's get out to sri live in singapore with more on today's trading action. >> it's extraordinary, isn't it? the chinese authorities are really running scared because of this meltdown we have been witnessing over the past couple of weeks in the chinese stock markets and they have thrown everything they can to stabilize sentiment. today was a case in point. we saw a very heavy though admittedly short lived slide in the afternoon session. we were down by well over 6%. as you can see still deeply in negative territory at the close. now we are off by well over 20%. i think it's about 25% over the last couple of weeks and it's very important to remember that the chinese authorities, be it the pboc or regulators or
beijing are going to be in the stock market trying to do their upmost to stabilize sentiment because of the wealth effect and remember it's underpinning the housing market so it has social stability implications. they don't want to see the stock market going. if the stock market goes the housing market goes as well. they'll be trying to bolster sentiment in the market. right now is to no avail. we haven't seen many bargain hunters or evidence of people buying the dips. perhaps they feel this has further to run. we need a deeper investor base. more professional investors in the market. they try to do that with the smart connect but all is going into a shares. anyway at this stage in the narrative. that's where we stand. back to you. >> sri, thank you so much as ever. now let's talk about ipos. the first day performance of an
ipo, very very important among new lysters. the top ten performers include the likes of shake shack, etsy and fitbit. etsy is now below it's trade since then. i have to remember one person saying it wouldn't do very well. >> someone. >> the top gainer on its first day of trade is rising just over 147% when it listed in april. >> but wilfred, the ipo engine is stalling across some industries and private funding is also halting some potential ipo candidates from making the move into the stock market. that according to a report that shows a big slow down over the last quarter. let's bring in the managing partner. a pleasure to have you on this morning. do you think it's the valuations that start ups are in the private market resulting in fewer companies going to raise money? >> good morning, thank you for having me.
>> valuations have a big impact in the private market. we've seen a certain amount of capital available for companies. private equity and strategic investors are looking to deploy capital and it creates a lot of opportunity for private companies. and these are companies that would have gone public previously. >> alex in your note you say that middle market ipo activity say bell weather for broader economic growth and that has been pretty soft. are we heading into a downturn for the economy? >> i believe we have to recognize that 2014 was a very good year and second quarter of 2015 while it was down 20% is much improved from the first quarter. while it's hard to predict what
the rest of the year will hold we are very positive that they will continue trending up. >> is greece in fact impacting the ipo market at all? >> certainly. but history tells us that in the long-term the u.s. market is very resilient. we're seeing strong investor confidence. especially in ipos. >> alex thank you so much for joining us today. much appreciated. now still to come here on worldwide exchange despite strong june sales numbers, one auto maker finds itself in hot water. we'll explain all the details after the break. >> we'll leave you with a look at how futures are trading ahead
>> the time for talking is over. negotiations are put on hold until after sunday's referendum but creditors are now arguing over whether the vote is in fact a yes or no to euro zone membership. >> ge asset sell off faces hurdles both sides of the atlantic. they're set to meet european regulators. this as it vows to defend it's electrolux sale. >> possible litigation costs related to its oil spill as they call a press conference for this morning.
>> dow indicating a higher open by 22 points. ahead of that highly anticipated june report where economists are expecting 230,000 nonfarm payrolls to be added by the month of june. european market versus been stealing the show here. the group meeting yesterday failed to produce a deal to now our eyes turn to that referendum where greek citizens will vote yes or no to austerity. cac 40 down about five points. mixed day of trade despite volatile trading we have been seeing over the past couple of days. xetra dax flat and the ftse 100 turning into positive territory at 6,610 up about two points. u.k. pmi construction at a four month high. lastly a quick look at the italian market. it's the underperformer down about 86 points. so greek lingering concerns and mixed economic data that
investors are embracing today. over to you. >> thanks seema. let's bring some news on the german january to june new car registrations up 5% on the year. june itself up 13% on the year so german auto sales data following u.s. auto sales data which was very positive. they'll face a rare public hearing today with the top u.s. auto safety regulator over it's ability to recall millions of potentially defected vehicles. the transportation administration could fine the company more than $750 million. it could also ask them to buy back or replace the defective cars or trucks if they failed to meet obligations in 22 separate recalls. basically flat today down 12% over the last three months. >> let's bring in the analyst at city that joins us live from new york.
thank you so much for joining us. there's been so much focus on this resurgence in auto demand. what do you think at the end of the day is fuelling it? is it easy access t money? to fund auto sales or consumer demand? >> it's consumer demand. we have been hearing a lot of talk about the peak of the auto cycle. we'll likely be at a 17 million plus level each year all the way through 2018 and it's been driven by pent up demand. a fun fact in the u.s. auto cycles and our view from our work we don't think much of the replacement cycle in the u. s. has begun. we're still in the early stages in terms of the age of cars on the road. with improvements in the last six months and the economy we have quite a bit more room to go. >> but we have the policy as loose as it's ever been. the life of cars as long as it's
ever been. surely some of what is happening at the moment in terms of strong sales is related to short-term cyclical factors. >> you're right. a very cyclical industry but when you look at the auto lending measures the value of used car prices are all looking healthy. even monthly payments is something people have said hasn't gone up and now it is starting to go higher. when you look at a 17 plus million environment through 2018 if you zoom that out a couple of decades it would actually look like a very normal cycle where we go above trend for about five years on the ratio of licensed drivers buying new vehicles. it actually really shouldn't be in our view viewed as such an extraordinary call and i think a lot of people are still a little bit confused of coming off such low levels in '09 and 2010 it feels like the market is too hot but we're seeing a very classic pent up demand cycle that still
has room to run in the u.s. we saw that yesterday with the june numbers. >> absolutely yes. we did see strong numbers yesterday. who is benefitting most from this? is this a strong dollar story? the foreign brands are benefitting? or domestic american brands that will see this play into their earnings? >> some of the segments that have done well pick up trucks and suvs tend to be stronger for the domestic brands so you're seeing you know market share gains for the pick up truck segment which has benefitted both gm and ford. we do a lot of work and think a lot of the pent up demand we have written about is concentrated in full sized pick up trucks. so there's an area we think can continue and of course lower gas prices over the past several months have provided an additional boost to the various suv segments. you're seeing a mixed shift that tends to play better into profitability. >> your top pick in the auto sector? >> one auto maker stock is
general general motors. we think that yesterday's numbers actually looked solid in what counts. retail sales being up 7%. transaction prices being higher. as i mention the pick up truck mix. we like gm. >> june auto sales rising 8% boosted by it's jeep suv brand? >> we don't cover those names. we only talk about gm and ford that we cover. >> thank you very much. have a great day. >> let's bring you the latest coming out of the euro group. he says that the greek no vote this weekend would not lead to improved negotiating positions. he also said that it's hard to bridge, quote, fundamental differences between greece and europe. so that's the latest coming from him clearly trying to urge people in greece to vote yes not no. >> let's take a look at the other top stories at this hour.
paypal is buying xoom. an online provider of money transfers for $898 ahead of the plit split from ebay. take a look at how xoom performed. it is up well right now, 24% in frankfurt. >> youtube, the video watching website, watch out. i can't believe we have to describe what youtube. by the way, youtube is a video watching website. facebook, a social media website is chasing youtube now. it's moving further into video sharing by splitting ad revenue with video publishers that post on the social media platform. they are look to monetize on the shift in taste toward watching clips online instead of on tv. >> we shouldn't be labeling facebook as a social media company. they made an acquisition in virtual reality. they bought what's app. they have video now and social media but they're no longer
social media. this say tech giant. >> because they evolved maybe they need to change the logo. >> maybe they will. they did a major overhaul of their image. perhaps not major. but facebook upgraded it's logo. here's before on the left and after. dramatic change on the right. can you spot the difference my friend? it's in the letter a along with a few other small differences. the social network told an online logo blog it wants to reflect where we are now and where we are headed. >> if we focus on this now just because we might as well. the previous a is an odd a isn't it? >> it's a traditional. >> it's like an upside down backwards g. >> that's the a you typically has. >> is it? >> it's on a keyboard. >> but the one on the right is much better. >> it's capital so i can't do it. because of that, i liked the new one. >> i think they look the same.
>> it's like an normal a. >> if you're going to make a change make it loud and bold. that's the way to do it. >> we're going to move on. universal pictures has released the trailer for its film steve jobs and it's caused quite a stir in silicon valley. the real paints the apple co-founder that died in 2011 as a demanding boss that steals the limelight and amasses huge wealth without any care for others. while he makes a heroic turn at the end it's sure to ruffle a few feathers. that's the second film to come out in a few years. still to come on the show the rumor mill is spinning over whether a settlement could be close on the bp oil spill. they plan to discuss major news today. details coming up after the break.
documents and meeting with analysts or officials from other airlines. executives have said in recent months they would limit growth to protect profits but it is of course an on going story. in the meantime these stocks moving lower. particularly american airlines down 2.8%. united air down 2.5. >> the authorities can have a big effect on share prices. can't they? >> they can. >> we'll talk about another one that might be affected by the authorities. do you see that link? officials from four u. s. gulf coast states are expected to hold separate news conferences today to discuss what they'll only say is an important announcement. that's sparking rumors they may have reached a settlement with bp over the oil spill. landon is going to break down all the details for us as ever from hq. >> good morning to you. attorneys general in louisiana, alabama, florida, and mississippi man to hold those conferences at 9:00 a.m. eastern time. they're not providing specifics but it likely involves some sort
of settlement of the bp spill. it killed 11 workers on the rig and gushed millions of gallons of oil into the gulf of mexico. the justice department says it's not holding it's own news conference but will have information available at the time of the announcement. this comes days before they're expected to rule on the amount of fines they owe for their roles in the explosion and spill that lasted for 87 days in 2010. the judge determined bp was liable for the spill under the u.s. clean water act and the disaster was the result of gross negligence. he has put the maximum fine at $13.7 billion. on monday the u.s. supreme court refused to hear an appeal on the maximum amount. clearing the way for the judge to make his final decision. the new orleans times reports today's announcement could include money for coastal restoration efforts. that would include billions of dollars to be used under the oil
pollution act to restore damage to fish and wildlife and opportunities. officials told environmental groups the state expects to receive up to $8 billion as it's share of the clean water act fines and damage resource payments. >> thank you very much. now the justice department is suing to block electrolux from buying ge's appliance business saying the $3.3 billion deal will hurt competition. the goal remains to close the sale by the end of the year. electrolux has been negotiating for months to save the deal and it's prepared to fight the lawsuit in court. let's see price action ge down flat in germany. >> meanwhile, general electric executives hope to sway antitrust regulators as the two sides meet to discuss the u.s. companies $13.9 billion bid for the power unit. the deal would harm competition. ceo has expressed confidence the
deal will be completed but adds regulation made it much tougher to get things done anywhere in the world. >> now swiss authorities say the u.s. filed extradition requests for seven fifa executives. they'll hold a hearing for officials arrested in may over bribes involving $150 million. >> elsewhere it was heart break for england's female football team as they were defeated by current champions japan at the world cup in canada. a last minute on goal sent the lionesses crashing out of the tournament while japan set up a meeting with the u.s. in the final. meanwhile, president sepp blatter will not attend the women's world cup final due to quote, personal reasons. >> surprised that from mr. blat blatter. i wonder if he's going on a family holiday? visiting the doj. >> perhaps. >> or more likely he's not going
to leave switzerland whatsoever. let's remind you the headlines before break. negotiations with greece are put on hold until after sunday's referendum. puerto rico makes it's scheduled bond payments avoiding a possible default and attorneys generals are set to hold separate news conferences discussing the bp oil spill. we're back in two.
now puerto rico made all of it's bond payments due on july 1st according to a government spokesperson avoiding a possible default. the power authority made it's scheduled payment with the help of an advance from bond insurers. puerto rico's governor signed a $9.8 billion budget for fiscal 2015 and 2016 and lawmakers say public workers will still get
paid. earlier, on wednesday, moody's cut bonds further into junk status. >> let's have a quick look at european markets very strong yesterday yesterday. they have softened throughout the day's trade. the dax down and that follows an over 2% gain yesterday. now the euro group president says a no vote in this referendum won't help negotiations adding the vote is on whether people are prepared to accept painful austerity. this as the greek's president says the euro and euro zone are the only option for greece. let's get out to julia for our latest update. she's live in athens, julia. >> i think he's precisely right there. what's going to happen after we get a no vote if we get that on sunday night? well the same proposals if not worse will be back on the table if they want to try to
negotiate. that's assuming the creditors believe there's any point in negotiating with this greek government given that they pushed against the conditions already. what we're seeing now is a significant further deterioration as a result of the capital controls. now you have the tourism sector the export sector. they're saying there's going to be significant impact on the economy. just to give an example they're saying the exporters are going to lose around 80 million euros a week. in terms of the loss of imports because the cash payment system isn't working. 600 million euros. they're warning as of next week or the week after we can start to see food shortages because they can't get the goods over here. who knows what's going to happen on sunday night. the belief is that the impact of the capital controls is its push support toward the yes vote rather than the no vote. but even if the yes vote wins it will be a very close call.
guys, we have to wait and see. two more days until the referendum. >> all eyes on july 5th. let's take a look at u.s. futures. what can we expect on wall street today? yesterday's stocks did end higher after a roller coaster ride for stocks over the past couple of days. a lot of that having to do with the uncertainty around greece and how things will play out. dow indicating a higher open by 25. nasdaq up about 9. >> going to add one further flash coming from the euro group head. euro zone can no longer support greece after a no vote in the referendum. it's a illusion that they could renegotiate after a no vote. a very clear package coming to the greek people that they should be voting yes. not no. >> one eye on greece. there are a few other pieces of economic data including weekly jobless claims with new filings
expected to hold steady from the previous week. at 10:00 a.m. may factory orders expected to drop for a second straight month. i want to get your thoughts first on the situation in greece because it's hard to draw a conclusion to the greek crisis given there are two probable outcomes. yes or no. how are investors positioning themselves ahead of the all important referendum on sunday? >> i think when you look at the overall picture i think greece is really more of a -- not even a major issue other than what we in the media make it to be. they're not that big of a deal. their gdp goes to entitlements there. merkel would like to have them out of the euro zone. they would rather see them go. the only concern that they really have is whether or not they let greece default. whether or not spain, portugal or italy will come behind that. overall, i don't think the vote and we saw that from sunday night.
we saw a quick sell off yet the last two days we have seen an overall rally. i don't think it's a bigger ordeal for the u.s. stock market other than what we want to make it out to be. >> arguably the moral hazard attached to greece leaving the euro zone. if the no vote wins on sunday how do you expect markets to react on monday todd? >> you'll probably see -- if we look at the markets in general they're in tight consolidation and have been for six months. we're really just stuck in an overall range and the markets themselves are looking for a reason to take out to the down side and get that long awaited correction. that might be the piece of news that would actually do that but we saw monday we came right back down to a level of support and rallied back up again. again, we've got a no vote. maybe pushes us through the bottom and then start to see some selling come into the market. >> let's talk about the jobs
coming a day earlier ahead of the weekend. what are you expecting from that? will it continue this trend from this week in terms of house prices and auto sales in terms of very positive data? >> i think that the jobs number will probably be probably a pretty big beat. you'll probably see north of 230. but i think that's the rub here is are the jobs really that good? they're not. the number is one thing but the actual quality of jobs has not been good throughout all of these jobs numbers but the real key still remains, the manipulation and the low interest rates between all the central banks around the world in the currency war. so if the jobs number is too hot, it would more likely create the market to sell off because the bond market has been trying to price in a rate increase from yellen. i don't think there will be a rate rise until at least next year now. i think that yellen is happy that it's keeping the headlines off of her. so i think the number will be great. as far as the headline it will
probably be 260 to 280 will probably be the number we'll see. >> tell us what you're buying at the moment? sector or stocks on a short-term perspective? >> i'm looking to buy into the gold sector. i'm buying gold stocks. we see gold down at year low levels here. gold mining stocks. bearish goal stocks like that are getting hammered. that's the right play and it to look back into oil stocks as well because they have been under a lot of pressure the last couple of weeks as well. >> thank you for joining us. a pleasure as always. author and founder of average joe options.com. >> i think it is interesting that we haven't seen gold rally as much given the type of uncertainty around the greek situation. you would think people would be finding safety in the shiny yellow medal. >> it's been very resistant to go up around 12,000. you'll have to discuss that carolyn. i'm off tomorrow. thank you for watching. >> next up is squawk box.
>> good morning, it's job thursday. could a healthy hiring trend mean the fed is more likely to raise rates sooner rather than later? plus the greeks are getting ready to vote and the world is watching. a sunday referendum could be a game changer for fate of the euro. and the piano man can still draw quite a crowd. jill billy joel now played more shows at madison square garden than any other artist. squawk box begins right now.
>> live from new york where business never sleeps, this is squawk box. >> good morning, everybody. welcome to squawk box here on cnbc. i'm becky quick with joe kernen and andrew ross sorkin. if you're just waking up this morning and catching up on your smartphone or computer. americans are suffering from digital amnesia. that's right. the digital could be ruining your memory. i'm a believer in that. we'll explain why and tell you what you can do to stop it a little bit later this morning. but first, let's get to the business of the morning. the june jobs report. hiring is expected to remain solid. maybe cool a little bit after reaching a five month high in the last government report. forecasters say that the economy probably added 233,000 jobs in june. they're looking for the unemployment rate to have dipped to